Florida’s Most Recent Ruling Will Change the State’s Medical Marijuana Business Licensing Structure
On July 9, 2019, the 1st District Court of Appeal ruled that Florida’s vertical integration of medical marijuana business licenses and current capping of the number of business licenses goes against Amendment 2, the constitutional amendment that broadly legalized medical marijuana in 2016. Vertical integration refers to the ability of one license to authorize a licensee to dispense, cultivate, and process medical marijuana rather than create specialty licenses for each operation type.
The court ruled that a 2017 statute implemented after the passing of Amendment 2 created “a vertically integrated business model which amends the constitutional definition of medical marijuana treatment centers (MMTCs) by requiring an entity to undertake several of the activities described in the amendment before the department can license it,” as judges Scott Makar, James Wolf and T. Kent Wetherell wrote in the majority opinion.
The appellate court found “it is in the public interest” to require health officials to register new medical marijuana operators “without applying the unconstitutional statutory provisions.” However, that finding “does not support requiring the department to immediately begin registering” medical marijuana operators at this stage of the proceedings.
The majority’s decision will effectively mandate an immediate change in the entire structure of the medical marijuana industry in Florida. This ruling comes after a year of litigation started between the state and previous unsuccessful applicants regarding the matter of who should be issued available marijuana business licenses, how many licenses should be issued in the state total, and whether or not the vertical integration of license in Florida was allowable.
To try to remedy the situation with the unsuccessful applicants who began the litigation process in the first place, the Florida Department of Health issued MMTC licenses to the eight applicants. That decision then reduced the current number of licenses available under the 2017 statute to three.
The 2017 statute also established a schedule for additional business licenses to become available as the number of patients who have qualified for medical marijuana increases. Under the law, four more licenses will become available once the patient database reaches 300,000. With 243,000 patients currently active in the database, state health officials predict the database will call for four new licenses as early as October 2019.
Now due to this recent ruling, the state will need to amend their marijuana business licensing structure to do away with vertical integration and allow specialty licensing for cultivation, processing, or dispensing. The department will need to issue operators for each new specialty license type in the near future, however as stated by the judges, the department is not to begin immediately registering operators at this time.
Begin Preparing for Florida Medical Marijuana Business License Applications
If you plan on applying for a medical marijuana business license in Florida when the state is ready to begin accepting applications, it’s best to begin preparing now to increase your chances of success. Begin educating yourself on what will be involved in the application process with our Florida Marijuana Business Starter Package. The package includes:
- An Informational Overview of Florida’s marijuana laws and program details
- An Application Guide & Checklist for a detailed summary and checklist of over 100 action items you'll need to complete before submitting your application
- A Business Plan Template to help you draft an executive summary for your business
- A Financial Plan Template to give you and your investors a comprehensive 3-year projection of what to expect when operating a medical marijuana business